SC: No separation pay if worker fired for theft, etc.

The Supreme Court held in one case that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may NOT be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. (G.R. No. 80609)

The Court noted that, in previous rulings (like in Firestone Tire and Rubber Company of the Philippines v. Lariosa or Soco v. Mercantile Corporation of Davao), separation pay, whenever found to be warranted, was required regardless of the nature or degree of the ground proved, be it mere inefficiency or something graver like immorality or dishonesty. The benediction of compassion was made to cover a multitude of sins, as it were, and to justify the helping hand to the validly dismissed employee whatever the reason for his dismissal.

This policy was re-examined in PAL v. NLRC (G.R. No. 80609). The Court said it was time to make a rational ruling that would be fair to both labor and management, especially to labor.

There should be no question that where it comes to a valid but not iniquitous causes as failure to comply with work standards, the grant of separation pay to the dismissed employee may be both just and compassionate, particularly if he has worked for some time with the company. For example, a subordinate who has irreconcilable policy or personal differences with his employer may be validly dismissed for demonstrated loss of confidence, which is an allowable ground. (G.R. No. 80609)

A working mother who has to be frequently absent because she has also to take care of her child may also be removed because of her poor attendance, this being another [just] ground. It is not the employee's fault if he does not have the necessary aptitude for his work but, on the other hand, the company cannot be required to maintain him just the same at the expense of the efficiency of its operations. He too may be validly replaced. Under these and similar circumstances, however, the award to the employee of separation pay would be sustainable under the social justice policy even if the separation is for cause. (G.R. No. 80609)

However, where the cause of the separation is more serious than mere inefficiency, the generosity of the law must be more discerning. There is no doubt it is compassionate to give separation pay to a salesman if he is dismissed for his inability to fill his quota but surely he does not deserve such generosity if his offense is, for example, misappropriation of the receipts of his sales. This is no longer mere incompetence but clear dishonesty. (G.R. No. 80609)A security guard found sleeping on the job is doubtless subject to dismissal but may be allowed separation pay since his conduct, while inept, is not depraved. But if he was in fact not really sleeping but sleeping with a prostitute during his tour of duty and in the company premises, the situation is changed completely. This is not only inefficiency but immorality and the grant of separation pay would be entirely unjustified. (G.R. No. 80609)

Even social justice cannot be involved in order to justify a grant of separation pay where dismissal is due to more serious grounds. The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best, it may mitigate the penalty but it certainly will not condone the offense. (G.R. No. 80609)
Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be the refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character. (G.R. No. 80609)

Separation pay has been defined as the amount that an employee receives at the time of his severance and is designed to provide the employee with the wherewithal during the period he is looking for another employment. However, this broad definition must not be taken at face value. There are only limited instances wherein separation pay can be granted. These instances are as follows: 1. Termination is for any of the authorized causes under the Labor Code; 2. Where there is illegal dismissal and reinstatement is no longer feasible; 3. As a measure of social justice where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character; xxx.